Alejandra Vasquez (Universidad de Santiago del Chile USACH)

An investigation of the interplay between individual and social preferences: Inequality Aversion in Chile a Lab in the Field experiment

Venue: Campus Luigi Einaudi, room 3 D1 01

Abstract: The protests in Chile in 2019 highlighted citizens’ strong dissatisfaction with Chilean society. High levels of inequality and negligible levels of redistribution may be one possible cause of this dissatisfaction, as suggested by a large body of empirical evidence showing that individuals are averse to income inequality (Fehr, Schmidt, 1999, Bolton, Ockenfels, 2000, Charness, Rabin, 2002, Cappelen, Konow, Sørensen, Tungodden, 2013, Clark, D’Ambrosio, 2015). However, we do not have a clear idea of the relative weight of such inequality aversion in Chile. To fill this gap, we estimated the inequality aversion parameter (defined as an individual’s willingness to pay for lower income inequality in a given society) using a lab-in-the-field experiment to study the Chilean sample. Our experimental design allows us to measure how inequality aversion varies with position in the income distribution and with the source of income inequality (the role of merit, wealth, and nepotism). We compare the Chilean measure of inequality aversion with results from experimental surveys in Uruguay ( Bergolo, Burdin, Burone, De Rosa, Giaccobasso, Leites 2022) and Sweden (Carlsson, Daruvala,Johansson‐Stenman, 2005). We applied an experimental online survey to students attending private and public universities and vocational-technical centers in different urban areas and from different socio-economic backgrounds. We collected a sample of 1,167 people.
Preliminary findings suggest that Chile is less inequality averse than other countries. It is also more meritocratic. Aversion to inequality increases when the origin is explained by wealth treatment.